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Golf Business Trends 2012 and The Opportunity for Growth

Golf Business Trends 2012 and The Opportunity for Growth. Presented to:. Golf Summit of Washington. NGF: Then and Now Golf Business Trends 2012 Opportunity for Growth. NGF: Then and Now. NGF at 77. Founding Members: Wilson Spalding MacGregor H&B Worthington Ball

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Golf Business Trends 2012 and The Opportunity for Growth

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  1. Golf Business Trends 2012 and The Opportunity for Growth Presented to: Golf Summit of Washington

  2. NGF: Then and Now • Golf Business Trends 2012 • Opportunity for Growth

  3. NGF: Then and Now

  4. NGF at 77 • Founding Members: • Wilson • Spalding • MacGregor • H&B • Worthington Ball • U.S. Rubber Herb and Joe Graffis Golfdom – Est. 1927 Golfing – Est. 1933 NGF Publication – Feb. 1955

  5. NGF Today • 3,500 Members • Daily Fee & Municipal Golf Courses • Private Clubs • Management companies • Golf businesses (equipment manufacturers, turf products, associations, etc.) NGF Board of Directors

  6. Contributing to the Growth of Golf Industry Research & Strategic Perspective Conferences & Education Support for Golf’s Major Initiatives & Associations GOLF2.0

  7. NGF Facility Membership Only $225/year We want YOU!

  8. Golf Business Trends 2012

  9. Rounds Played

  10. Rounds Played – 2012 YTD (Up 5.7% Nationally) (% Change from previous year through December) Mountain (+7.0%) West N Central (+7.6%) New England (+3.2%) East N Central (+10.8%) Pacific (+1.6%) Mid Atlantic (+10.1%) South Atlantic (+2.4%) +2.0% or higher +1.9% to -1.9% -2.0% or lower South Central (+5.0%) Source: Golf Datatech National Rounds Played Report in cooperation with PGA Performance Trak and the NGF.Based on a sample of approximately 4,000 reporting facilities

  11. Rounds Played – 2012 YTD (Public Facility Concentration 2012 U.S.) (The highlighted area represents 47% of the nation’s public golf facilities. Rounds are up 9% in this part of the country. West N Central (+7.6%) East N Central (+10.8%) Mid Atlantic (+10.1%) Source: Golf Datatech National Rounds Played Report and NGF golf facility database.

  12. Factors Underlying Jump in Rounds • Weather! • PGA Performance Trak reports playable days up over 6.5% nationally • Consumer Confidence and Spending • Consumer confidence & spending have been gradually rising as the recession driven “hunker down” mentality starts to fade

  13. Rounds Volume % Change Year Over Year 5.7% Source: Golf Datatech National Rounds Played Report

  14. Golf Participation

  15. Short Term Participant Trend Participants (MM) 30.0 29.8 29.5 28.6 27.1 26.1 25.7 44% 56% Source: NGF golf participation study

  16. Golf Course Development

  17. Growth of Golf Facilities Number of facilities Private Daily Fee Municipal Source: NGF

  18. Net Change in Supply Net Change = new course openings minus permanent closures (18HEQ), not factoring in courses closing for, or reopening from, renovations Source: NGF Facility Tracking

  19. Europe 7,014 21% International Golf Course Supply North America 18,410 54% Asia 4,425 13% Africa 865 3% South America 603 2% Oceania 2,014 6% TOTAL 33,331 199 Golfing Countries

  20. Looking Ahead

  21. Consumer Confidence Index 90 = Normal Index currently stands at 58.6 through January 2013 Source: The Conference Board

  22. Recessionary Impact on Net Worth S&P 500 and Case-Shiller Home Value Indices S&P 500 Index (year 2000 as 100) Case-Shiller Home Value Index (year 2000 as 100) Source: S&P 500 / Case-Shiller

  23. Consumer Spending Improving Real Personal Consumption Expenditure Index [Index numbers, 2005=100] Seasonally adjusted Source: Bureau of Economic Analysis – Updated as of Dec. 2012

  24. The Opportunity For Growth • Latent Demand • Retention • Building Commitment

  25. Latent Demand Definition: People who express an interest in playing golf, but have not yet started. HOW INTERESTED: Very 6 MM Somewhat 19 MM A Little 47 MM Q: How interested are you in playing golf now? Percent of non-golfing population over age 6 Source: NGF/Synovate

  26. Latent Demand Segments Percent Of Latent Latent Very/Somewhat Interested Beginners (Never Played) Those With Some Experience (Never Committed)1 Former Committed Golfers2 12 47% 9 37% 4 16% 25 100% (1) Classified themselves as “Not” or “OK” (2) Classified themselves as “Fun”, “Hooked” or “Nut” Source: NGF/Synovate

  27. Demographics of Latent Demand • Golf’s latent demand skews: • Female (48% versus 19% of all golfers) • Average Income <$50K (44% versus 23% of all golfers) • Younger – Under 30(43% versus 28% of all golfers) Source: NGF/Synovate

  28. What’s Stopping Them from Playing Main reasons they haven’t started playing golf yet/again I’m concerned about the cost Not enough time – I’m pretty busy right now Not really sure how to get started* There’s nothing stopping me – haven’t gotten around to it I don’t have anyone to play with Nobody has suggested it or invited me *NOTE: Asked only of those who have never played golf Source: NGF/Synovate

  29. Lapsed Participants Definition: People age 18-69 who have not played in the past two years, but played at some point in the past Lapsed Participants 21.5 Million Lifetime golf experience of Nots and OKs: Played 1-2: 31% Played 3-9: 42% Played 10+: 27% Source: NGF/Synovate

  30. Demographics of Lapsed Participants • Lapsed participants skew: • Female (41% versus 19% of all golfers) • Average Income <$50K (38% versus 23% of all golfers) Source: NGF/Synovate

  31. What drove them away? Aside from “time” and “money” (both of which continue to be cited as the first and second reason respectively), here are the main issues that drive participants away: • Difficulty • Embarrassment • Stuffiness • Intimidation • Slow play • Rude golfers Source: NGF/Synovate

  32. Understanding Commitment to GolfFrom the “Nuts” to the “Nots”

  33. Traditional View 25.7 Million Golfers 11.3 M OCCASIONAL (1-7 Rounds) 14.4 M CORE (8+ Rounds) • 6% of Rounds • 7% of Spend • 94% of Rounds • 93% of Spend *Average among those who keep score (79% of occasional; 95% of core) Source: NGF/Synovate

  34. Commitment Levels NUTS HOOKED CASUAL FRINGE NOTS I’m a “golf nut,” I love the game and it’s my favorite activity I’m “hooked,” it’s one of my favorite things to do I’m a “casual” golfer – it’s one of several ways I like to spend my recreational time Golf is OK, but I most often choose to do something else with my recreational time I don’t really consider myself a golfer, I play rarely and usually only at the urging of others

  35. Impact of Commitment 25.7 Million Golfers * Percent who say they will be playing in 2 years (Top 2 Box) unless physically unable Source: NGF/Synovate

  36. Frequency vs. Commitment Segments OCCASIONAL (1-7 Rounds) CORE (8+ Rounds) Commitment Category Commitment Category Fringe Fringe Casual Casual Source: NGF/Synovate

  37. Attraction to the Game Reasons golfers like golf: % mentioned as “one of the main reasons I like golf” Source: NGF/Synovate

  38. Demographics Source: NGF/Synovate

  39. The Underpinnings of Commitment Correlation (r) (with Commitment) Completely Agree (5 on a 5 point scale) COMPETENCE .46 .42 Hooked Casual Fringe COMFORT .42 .42 Source: NGF/Synovate

  40. Competence & Comfort Lead to Retention “Comfort” Index by Retention Likelihood* * Likelihood to be playing 2 years from now Competence/Comfort factors scored and indexed to Hooked Golfers (100) Source: NGF/Synovate

  41. What Drives People Away? HOOKED & NUTS NOT & FRINGE CASUAL • Embarrassment • Intimidation • Stuffiness • Rude golfers • Slow play • Rude golfers • Embarrassment • Stuffiness • Slow play • Rude golfers • Impolite staff • Stuffiness Could cause them to “walk” from the GAME Probably reducing frequency Could cause them to “walk” from your COURSE Source: NGF/Synovate

  42. It Comes Down to Having Fun % Top 3 Box (8-10) FUN COMMITMENT Q. All things considered, how much FUN is golf for you? (0-10 Scale; 10 = Really Fun) Source: NGF/Synovate

  43. … and Perceiving Value Value Rating Fun Rating Source: NGF/Synovate

  44. The Equation F = Fun C = Commitment PV = Perceived Value

  45. Commitment = Prioritization AVERAGE COMMITMENT $86K $84K $88K $73K $92K Avg. Income Source: NGF/Synovate

  46. Key Findings • More committed golfers than implied by core and occasional golfer segmentation • Plenty of latent demand • Deepen engagement by: • Increasing competence and managing expectations • Increasing comfort around the course and other golfers • More FUN, leads to deeper commitment, increased retention, higher perceived value, rounds and spending • Time and money are not the problem!

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